System, method, and device for autonomous fund management by computer-based algorithms

ABSTRACT

A method for autonomous fund management including the steps of selecting a certain number of securities to create a first group of securities from a publicly traded index, discarding securities from the first group based on filter criteria to create a second group of securities, categorizing the securities from the second group of securities to assign the securities to different industry sectors, grouping a predefined number of the categorized securities into a number n of security pools, such that each security in a same security pool is categorized to a same industry sector, and trading securities within the security pools, such that a first quantity of a first security within a pool is sold and a second quantity of a second security within the pool is purchased when a trade trigger is met, the trade trigger including an event when a ratio between a price of the first security and a price of the second security meets a predefined threshold.

CROSS-REFERENCE TO RELATED APPLICATIONS

The present application claims priority to International patentapplication with the Serial No. PCT/IB2015/059286, filed on Dec. 2,2015, the entire contents thereof being herewith incorporated byreference.

FIELD OF THE INVENTION

The present invention is directed to the field of automatic andautonomous computer-controlled management and trading of investmentportfolios and funds to increase the financial performance of the fundsin comparison with trading indexes.

BACKGROUND

In the field of fund and portfolio management for investors,professional fund managers that try to provide for above-averageperformance for their portfolio for investing clients rely heavily onmarket research and financial analysis and securities analysis, togather specific knowledge and predictions so that they can predictbetter performance for certain types of securities. The costs of theresearch and the management of such portfolio with such analysis areusually borne by the client, usually as fees or in a yearly percentagethat is calculated based on the monetary value of the portfolio duringthe year. Also, in providing portfolio management services, often fundmanagers refer to speculative investment strategies, that can be overlyrisky. In addition, trading activities are often subject to legalscrutiny for alleged insider trading, based on the activities of thefund managers. Generally, the traditional way of portfolio management iscostly and requires substantial human intervention, to update certainportfolio positions during the lifetime of the portfolio.

In light of the above described disadvantages, novel automatic fundmanagement systems, methods, and devices are desired, that do notrequire substantial management and analysis cost overhead, that arenon-speculative, and can be performed in an automated way by acomputerized system.

SUMMARY

According to one aspect of the present invention, a method forperforming an automated fund management is provided, performed on ahardware processor of a computer that has access via the Internet to afinancial trading service. Preferably, the method includes the steps ofselecting a certain number of securities to create a first group ofsecurities from a publicly traded index, discarding securities from thefirst group based on filter criteria to create a second group ofsecurities, and categorizing the securities from the second group ofsecurities to assign the securities to different industry sectors.

In addition, the method further preferably includes the steps ofgrouping a predefined number of the categorized securities into a numbern of security pools, such that each security in a same security pool iscategorized to a same industry sector, and trading securities within thesecurity pools, such that a first quantity of a first security within apool is sold and a second quantity of a second security within the poolis purchased when a trade trigger is met, the trade trigger including anevent when a ratio between a price of the first security and a price ofthe second security meets a predefined threshold.

According to another aspect of the present invention, a system forautonomous fund management is provided. Preferably, the system includesa hardware computer having access to online financial trading service,and a display screen. In addition, preferably, the hardware computer isconfigured to select a certain number of securities to create a firstgroup of securities from a publicly traded index, discard securitiesfrom the first group based on filter criteria to create a second groupof securities, categorize the securities from the second group ofsecurities to assign the securities to different industry sectors, andgroup the categorized securities from the second group of securitiesinto a set of security pools, each security in a same security poolassigned to a same category of securities.

Moreover, the hardware computer is further preferably configured to,during a trading period, trade securities within the security pools,such that a first quantity of a first security within a pool is sold anda second quantity of a second security within the pool is purchased whena trade trigger is met, the trade trigger including an event when aratio between a price of the first security and a price of the secondsecurity meets a predefined threshold.

According to yet another aspect of the present invention, anon-transitory computer readable medium is provided, the non-transitorycomputer readable medium having computer instructions recorded thereon,the computer instructions configured to perform a method for autonomousfund management when executed on a hardware computer. Preferably, thehardware computer has access to an online financial trading service, andthe performed method preferably includes the steps of selecting acertain number of securities to create a first group of securities froma publicly traded index, discarding securities from the first groupbased on filter criteria to create a second group of securities,categorizing the securities from the second group of securities toassign the securities to different industry sectors, and grouping apredefined number of the categorized securities into a number n ofsecurity pools, such that each security in a same security pool iscategorized to a same industry sector.

Moreover, the method preferably further includes the step of tradingsecurities within the security pools, such that a first quantity of afirst security within a pool is sold and a second quantity of a secondsecurity within the pool is purchased when a trade trigger is met, thetrade trigger including an event when a ratio between a price of thefirst security and a price of the second security meets a predefinedthreshold.

The above and other objects, features and advantages of the presentinvention and the manner of realizing them will become more apparent,and the invention itself will best be understood from a study of thefollowing description and appended claims with reference to the attacheddrawings showing some preferred embodiments of the invention.

BRIEF DESCRIPTION OF THE SEVERAL VIEWS OF THE DRAWINGS

The accompanying drawings, which are incorporated herein and constitutepart of this specification, illustrate the presently preferredembodiments of the invention, and together with the general descriptiongiven above and the detailed description given below, serve to explainfeatures of the invention.

FIG. 1 shows a representation of a screenshot from a graphical userinterface generated by the system showing the absolute tradingperformance of the managed fund against the Dow Jones index;

FIG. 2 shows the monetary performance of the managed fund compared tothe Dow Jones index and another fund managed by background artsolutions, including the operating and commission expenses;

FIG. 3A shows an exemplary flowchart of a method for performing theautonomous fund management, and FIG. 3B shows a selection process tocreate pools, according to one aspect of the present invention;

FIG. 4 shows a schematic representation of the system for performing theautonomous fund management according to another aspect of the presentinvention;

FIGS. 5A-5D shows different charts and a flowchart of the operation of atrailing trigger for triggering a trade of yet another aspect of thepresent invention;

FIG. 6 depicts an exemplary table showing the results of a filter thatis applied to a first group of securities to obtain a second group ofsecurities based on the filter criteria;

FIG. 7A shows an automated trading example and FIG. 7B shows anexemplary table that shows six different scenarios of trades performedby the autonomous fund management;

FIG. 8 shows an exemplary table that shows another aspect forcalculating a number of securities that is purchased upon a sale;

FIG. 9 shows an exemplary data set for a master security file that canbe created for each security that is gathered into the first group ofsecurities;

FIG. 10 shows an exemplary data set of a pending order file to show datathat is associated with an order that can be used to set up an orderwith an e-trading service;

FIG. 11 shows an exemplary data set showing twelve different pools ofshares with securities from the second data set;

FIG. 12 shows a chart with experimental data on probabilities of anexecution of an order;

FIG. 13 shows charts comparing probabilities of executed trades versussavings percentages; and

FIG. 14 shows an exemplary prompt or message that can be generated bythe system for alerting a user on actual saving reaching a certain levelabove the requested savings.

Herein, identical reference numerals are used, where possible, todesignate identical elements that are common to the figures. Also, theimages in the drawings are simplified for illustration purposes and maynot be depicted to scale.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

The system, method, and device for performing the autonomous fundmanagement according to one aspect of the present invention employs anautonomous fund management (AFM) procedure for the digital marketplacewhich does not rely on traditional financial research and analysis. Inthe following specification, aspects of the present invention will bereferred to as the system, however, the invention can be implemented aswell as a method, a device, and also a non-transitory computer readablemedium. Instead, the present system uses computer-based algorithms,calculations, rules and safety nets to achieve better trading results.The system replaces market and financial research and analysis withmathematical formulae operated on a computerized system, the systemcapable of running on a hardware processing device, for example a serversystem such as an SQL server that is connected to various data resourcesover the Internet. The procedure can operate autonomously without humanintervention. One of the goals of the system to performing theautonomous fund management is to outperform major market indexes by 1% amonth in a risk-free and financially stable environment. Series ofexperimental results have confirmed the outperformance of the markets.

According to an aspect of the present invention, the system allows touse short-term random movements of stock prices during one or moretrading days that are used to get better trading conditions when sellinga first stock with the purpose to buy a second different stock. Sincethe early 2000s, online databases, real-time quotes, web-based trading,application program interface (API) links to various online andreal-time data sources and low commission rates were introduced to themarketplace. Based on the availability of online data and thecomputer-based access thereto, the present system has been developedthat combines a series of computer-based algorithms and rules toimplement a method for a computer-based autonomous portfolio managementtool. For example, during a full year of experimental non-publictesting, an account that managed the trading according to the presentsystem outperformed some of the major market indexes, for example theDow Jones, S&P500 and NASDAQ by 12.1%, 14.8% and 18.9% respectively, asshown in FIG. 1.

The present system for performing the autonomous fund management isdifferent from existing asset management solutions, and is alsocompletely different from traditional trading practices. The proposedsystem can outperform a market index by extracting relatively smallgains from short-term anomalies in stock prices and quotes during one ormore trading days, and runs entirely automatized without humanintervention. Upon occurrence of certain unexpected events, the systemcan be configured to generate a user warning message or prompt, so thata manual intervention can be allowed, for example but not limited tomergers, splits, International Securities Identification Number Changes(ISIN), profit warnings, removal of securities from stock exchange,major price movements. As can be seen in FIG. 1, an absolute performancechart is shown that details how the present system can achieve specificsuperior results as compared to background methods, and preforms withsuperior results on a daily basis over a full year. It is shown how theperformance of an account and portfolio managed by the present systemgradually and steadily drifts apart from the Dow Jones financial index,thereby outperforming a major market index. The system is operable onboth United States trading indexes and International ones.

For example, it can be seen that the percentage of “Daily AFM” positivedays is at 54.6% which means that out of the 251 days the New York StockExchange (NYSE) was open, the present system actually outperformed themarket on 137 days and underperformed on 114 days. Moreover, during thatsame time period, the present system executed on average 4.7 trades aday, and each trade was in a range between $50 to $100,000. Moreover, inmost common e-banking platforms, commissions ran at approximately $4 pertrade, which is a negligible factor given the average size of thetrades. Also, when using the procedure, the Security Exchange Commission(SEC) fees were also taken into account to calculate the performance.

According to an aspect of the present invention, the system provides ofan entirely different approach to manage and valorize an investmentportfolio. It is capable of removing subjectivity from the purchase andsale process, and apart from the initial choice of compatiblesecurities, no market and securities research needs to be is undertaken.The procedure depends entirely on computer-based algorithms, safety netsand alerts, and the experimental results discusses above show that themanaged portfolios are turned over at above the accepted rate, and thatthe managed portfolios have outperformed the common market indexes at aregular pace. Commonly, with background art solutions, institutions thatprovide portfolio and/or fund management services, with the exception ofindex funds, use research to determine their investment strategy, andsuch research is expensive and due to market complexity andunforeseeable events, the results remain uncertain. Moreover, managementcommissions and expenses reduce the value of a portfolio by between 1.0%and 1.5% a year, which is one reason why investors shy away fromportfolio and fund management provides and turn to indexed funds wherefees are lower. The present system takes advantage of short-termmovements of share prices, for example with a time period of one toseveral minutes, that are due to trading activity, and that are notbased on market fundamentals. Therefore, on a daily basis, small savingsthat can be accumulated over a certain time period, by using theseshort-term movements.

The present system has been tested with experiments with a portfolio ofabout $7 million. A single portfolio managed by the system, method anddevice relative to a particular index could be as high as $50 millionwithout affecting performance. Moreover, similar portfolios relative tothe same index can be set up concurrently by changing internalparameters, and managed by the present system. It is therefore possiblethat the accounts that are managed by the present system couldoutperform one particular index with maybe $100-$200 million. Moreover,according to another aspect of the present invention, the system can beadapted to any situation where real-time electronic quotes and tradingfacilities can be accessed, for example via online services for examplebut not limited to an API of a e-trading company or bank. Also, thepresent system can be used to outperform a whole range of domestic andforeign sector indexes.

Moreover, the present system, as a function of which index the managedfund is set to outperform, different stocks, shares or other securitiescan be traded. A group of tradable securities are filtered, sorted, andorganized, and these selected securities are fed to a database andtraded through an API via an e-trading partner. The system usesinteractive trading algorithms that interactive trading algorithms fortrading decisions, will use specific algorithms to handle savings andlosses, uses correction and updating formulae. The system allows foradaptation of positive values, general date and time adjustments, andalerts and safety nets that follow specific rules and algorithms can putthe trading on hold, for example by requesting human intervention. Inaddition, via an API, the system can stop the automatic trading and putthe trading on hold, and prompt of a user intervention after thedetection of different criteria, such as but not limited to inaccurateor unreasonable stock prices, unexpected swings in markets and quoteswithin a certain range, trading halted by either the stock exchangemarket or the stock itself, changes in ISIN symbols, mergers.

Generally, the system according to another aspect of the presentinvention can be configured and operated by a service provider or abrokerage firm that manages portfolio accounts of several clients, forexample a bank that manages retirement accounts, investment accounts,but can also be operated directly by a private individual to manage hisown account. It can be configured such that both the investor, forexample the clients of the service provider, and the service providerthat operates the system, method and device. For example, given a $10million portfolio of an investor's account with exactly the sameperformance as that shown in FIG. 2, the first the portfolio is managedin the traditional manner with a performance similar to the Dow JonesIndustrial Index (DJIA) and second, the portfolio is managed with thepresent system, method and device. It is shown that the DJIA increasedby 16.3%, while the portfolio managed by the present system, method ordevice increased by 28.4%. Moreover, the traditionally managed portfolioincreased by 14.8% after a 1.4% commission charge, to reach the value of$151'410. Its value would have increased by $1.478 million net. Incontrast thereto, the portfolio managed by the present system would haveincreased by $2.327 million net and have been charged $512'550 incommissions and administrative charges, given a fixed fee per trade. Itcan be seen that for both the investor and the service provider, thesystem can be beneficial to both, however, the $10 million portfoliowould have a net gain of $848'860 as compared to the background artmethod of managing a portfolio that follows the DIJA index, and themanagement fees increased more than three-fold from $151'410 to$512'550.

In background art fund management methods, research represents a largeportion of operating expenses in traditional fund management. This costis passed on to investors in the form of fees and commissions. Certaininstitutions practice intrinsic value investing, attempting tocapitalize on discrepancies between a market price of a security and theestimate of fair value in the present or the future. Such mispricingprovides opportunities for active managers with specialist knowledge tooutperform. In contrast thereto, the present system uses analgorithm-driven approach that excludes any subject determination andanalysis. Also, the system operates on a non-speculative basis, as noshorts, no margins, no arbitrage, no options and no high frequencytrading is performed. Basically, the system can invest in selectedstocks and securities, or categories of stocks and securities that havelong positions in blue chips and a cash reserve. Moreover, the systemoperates also on a market-neutral basis, as it performs equally well inbull as in bear markets, and the experimental results have shown thatthe best results are achieved when markets are active. Furthermore, ithas been shown that the system can be configured to generate revenue forthe service provider by a trading commission between $3 to $4 per trade,and have shown to represent a negligible amount compared to the savingsgenerated by each transaction. When trading in the United States, SECfees represent a slightly higher cost than trading commissions.

Next, according to another aspect of the present invention, a method isprovided for automated fund management, as schematically shown in FIG.3A. In a first step S1, the portfolio for automated fund management(AFM) is created. This first step S1 is also schematically shown in FIG.3B. This step sets up the basis for the AFM. This includes a couple ofsubsteps. In a first substep S11, the user 20, which can be an investorhimself or an operator of the system 100, for example a person withexpertise in securities trading, chooses a trading index that theportfolio should outperform. For example, the user 20 can choosedifferent trading indexes that are publicly traded, for example S&P 500,S&P 100, DJIA, FTSE, Nasdaq, SMI, Hong Kong Hang Seng, Nikkei 225, CAC40, Frankfurt DAX, Russell 2000, or other publicly traded indexes. In asecond substep S12, a list is established consisting of securities fromthat chosen index, to create a first group of securities. This list canbe saved as a data structure in local or cloud memory. This can be doneby a user or an automated process who selects securities based oncertain criteria to select specific securities for a pool of securities,for example with the goal to create a diversified portfolio.

Next, in a third substep S13, securities from the first group are sortedand filtered to be removed by device 10, to create a second group ofsecurities. This substep requires filtering and sorting all securitiesin the index to end up with a list of tradable securities that belong tothe second group of securities, and the second group of securitiesprovides for a further refinement of securities that can be used for theAFM. The goal is to generate a short list of securities, the secondgroup of securities that is smaller than the first group of securities.For example, the third substep S13 can be done by the applyingpredetermined elimination criteria with device 10 to the securities ofthe first group, for example by elimination of certain securities fromthe first group based on the following criteria: (i) Removal ofsecurities with a volatility outside a predefined range. For example,securities can have a volatility that is either too high too low thatwould be a risk for the stability of the AFM. The acceptable volatilitycan be defined as being within a certain range, for example above andbelow a lower and upper threshold of volatility that can be expressed inan average or median daily, weekly, or monthly percentage change inmonetary value, respectively. (ii) Removal of securities that areuntradeable. For example, securities can be removed from the first groupthat have insufficient average daily volume, for example when theaverage market value of the daily traded volume is less than a certainthreshold, i.e. the traded market volume per day needs to be at leasttwenty times the size of the security that is in the AFM pool, removessecurities that are penny stock, removes securities in which a tradewould affect subsequent bid and ask quotes. (iii) Removal of securitiesthat would, when traded, affect the stock price. For example, securitiesare removed for which a sale or purchase would have an effect on theoverall ask and bid price when they are traded, for example but notlimited to securities that have a very high unit price. It is importantfor the AFM that a sale or a purchase of a security in the AFM pool isunnoticed. For example, system 100 can access online portals ofassociations or institutions that include securities registration dataand other type of securities data, that allows to perform theelimination. For example, the S&P database on securities or the SEC canbe accessed via data services 50, to gather the relevant information.

For step S13, other rules can be applied to the filter, for exampleshares can be filtered by an amount of shares being publicly traded,share price, bid/ask spread, market marker. FIG. 6 show the results of afilter that has been applied to ten securities in the first group thathave been reduced to six (6) securities in the second group. Securitiesthat have a trading volume below a certain threshold, in the variantshown below a daily trade volume of $10M have been discarded, based onthe step S13, (i). Also, the filter algorithm required that the bid-askspread (B/A spread) be lower than 1%, and that the volume of tradedshares be above 500,000.

Thereafter, in a fourth substep S14, all the securities that remain inthe second group of securities are categorized and sorted by sectors andsubsectors, to create sets of categorized securities by device 10. Thiscan be done by using the global industry classification standard (GICS),or other classification standards, and applying the standard to all ofthe securities in the second group. In a variant, based on expertise ofthe service provider, a proprietary classification standard can becreated. In this substep, the goal is or provide different sets ofsecurities that are independent from each other. For example, one set ofsecurities can be categorized as “Finance” with securities fromdifferent traded banks and financial service companies, and one set ofsecurities can be categorized as “Software” with securities of differentsoftware companies that are publicly traded within the chosen index. Asanother example, one set of securities can be categorized as “Pharma,”while to other set of securities can be categorized as “Construction.”The idea is to create sets of securities that act independently fromeach other in the public trade. The step S14 of categorizing can also bedone before either the step S12 and S13, for example after choosing theindex in step S11, or after the forming of the first group in step S12.

Next, in a fifth substep S15, a number n of multiple-choice pools P, forexample pools P₁ to Pn of securities are created by device 10, that areused for the AFM. In this step S15, a certain number of securities fromone and the same set of securities is assigned to each pool, for examplefor pool P₁. For example, securities or shares A, B, C, D, and E thatall belong to the same set of securities are assigned to a pool P₁.After this substep, (i) pools P₁ to P_(n) will be created to contain apredefined number of securities from the same classification sector andsubsector. This allows to create different pools P₁ to P_(n) each havinga certain number of different securities from the same set of securitiesassigned thereto. In this way, each pool is separate and independentfrom each other. FIG. 11 shows an exemplary embodiment where twelve(n=12) different pools P₁ to P₁₂ of securities have been created, eachpool labelled by a different category of securities, and each poolincluding five (5) securities from the same set of securities. Moreover,the value of all n pools can be chosen correspond to the weight of eachclassification sector. For example, a price-weighted index is a stockindex in which each stock (i.e. stock or security of General Electric)influences the index (i.e. Dow Jones industrial) in proportion to itsprice per share. The value of the index is generated by adding theprices of each of the stocks or securities in the index and dividingthem by the total number of stocks or securities. Stocks or securitieswith a higher price will be given more weight and, therefore, will havea greater influence over the performance of the index.

Then, (ii) an initial trading monetary amount M is assigned to each poolP. The initial trading monetary amount M corresponds to at least anamount of cash that will be available for each pool P before startingthe AFM. For example, for pool P₁ an amount M₁ of 250,000$ can beassigned. Next, (iii) the specific quantity of securities or shares thatcan be purchased with initial trading monetary amount M at a timeinstant t₀ is calculated, for each security, and for each pool, andsaved to an reference data set. For this step, purchase prices or askingprice for the securities or shares needs to be known, by accessing ane-trading platform and by simultaneously reading a purchase price foreach one of the securities in the respective pool P.

As an example, for pool P₁, a quantity of shares for each security A, B,C, D, E that can be purchased with amount M₁ is calculated by device 10.For this purpose, a purchase or asking price for all securities A, B, C,D, E assigned to pool P₁ needs to be known at a specific time instant.This is done by accessing simultaneously, via the electronic tradingplatform or other online information database, at certain time instantt₀ all purchase prices of securities or shares A, B, C, D, E to have ashare price at a same time moment. This step is repeated for each poolP. The different pools P of a portfolio can be designed to have the sameinitial trading amount, but it is also possible to create differentpools with different initial trading amounts. An example is given inFIG. 7A. For a pool P₁, an initial trading monetary amount M₁ isassigned to be $250,000. Next, at time t₀, simultaneously a quantity ofsecurities or shares A, B, C, D, E that are assigned to pool P₁ that canbe purchased with M₁ is calculated. As an asking or purchase price persecurity for each security A, B, C, D, E varies, different quantities ofsecurities result, for example, 5000 shares of security A that costs $50at time instant t₀, 11,364 shares of security B that costs $22 at timeinstant t₀, 4,464 shares of security C that costs $56 at time instantt₀, 6,579 shares of security A that costs $38 at time instant t₀, and13,158 shares of security E that costs $19 at time instant t₀. Thisvalues are all stored in a memory as a reference data set so that theycan be used as an initial data set for the AFM trading algorithm, forthe time instant t₀.

In the variant discussed, five securities (5) are assigned to each pool,but it is possible to assign between 2 to 10 securities from the sameset to each pool, preferably between 2 and 6 securities. Also, more thanone pool P₁ can be subject to the AFM trading algorithm, for example upto and more than fifty (n=50) pools, preferably between n=20 to n=100pools.

Next, a step of initiating or starting the automated trading is done bydevice 10, being the sixth substep S16. In a sixth subset S16, step (i)of funding, an initial cash C is made available for a respective pool P,to fund pool P. This can be done by assigning a bank account from bank80 with liquid assets to each pool P. Generally, the initial cash amountC can correspond exactly to the initial trading monetary amount M, or acash amount that is higher than M. For example, in the variant shown ofFIG. 7A, the initial cash amount C₁ is determined to be M₁ for pool P₁.However, the initial cash amount C₁ can also be more than initialtrading monetary amount M₁, for example an addition of a certainpercentage of cash reserve, for example a 5% cash reserve in addition toamount M₁.

Next, in the sixth substep S16, in a step (ii) of initial purchasing, afirst purchase order is entered via the electronic trading platform bydevice 10, in which an initial order is entered for a respective pool P.This done by buying a certain quantity of securities or shares from onlyone of securities A, B, C, D, E of the pool P, by using the initial cashamount C that is assigned to the respective pool. Preferably, thispurchase is done at the same or substantially the same time t₀, and thequantity of shares purchased from either security A, B, C, D, Ecorresponds to the quantity calculated in step S15, (iii). The firstpurchase order can be done by choosing one of security A, B, C, D, E atrandom by the system, or by starting with one of securities A, B, C, D,E that meets certain purchase criteria. Only one type of security ofpool P is purchased in this order. In the example shown in FIG. 7A,security A has been chosen for the initial purchase, and for $250,000 ofcash, 5'000 shares of security A are purchased, at time t₀. As alreadymentioned, preferably, the step of calculating a quantity of shares foreach security A, B, C, D, E if S15, (iii), and a step S16, (ii) ofentering the first purchase order can be done simultaneously at a timet₀, or within a short time interval. Moreover, step S16 can be donesimultaneously or sequentially an entire portfolio, the portfolioincluding pools P₁ to P_(n).

Subsequently, the second step S2 of the method can be performed bysystem 100, in which the AFM procedure is started and continuouslyperformed, in an automated fashion, for example by executing a method byprocessing device 10. After step S16 of initiating the automatedtrading, step S2 is performed as an automated trading algorithm based onall the securities that are available in each pool P. In particular,with the automated trading algorithm, the currently purchased securityfrom a selected pool P_(i) is traded against another, different securityfrom the same pool P_(i), the security being different from thecurrently purchased security, if a certain trading criteria is met. Forthis trading, preferably, the trading algorithm follows the stepsdescribed below.

First a substep S21 of S2 is performed, by tracking prices ofsecurities. Starting from time instant t₀, an evolution of a price orquote of each security within each pool P is observed by device 10, forexample by regularly accessing and gathering data from data services 50,electronic trading platforms 30, and stock exchange 60. For example,starting from time instant t₀, a timely evolution of a price or quote ofthe currently purchased security A is observed and tracked, as well as atimely evolution of a price or quote for all the remaining securities B,C, D and E in pool P that have not been purchased. At the same time, aprice or quote of currently purchased security A is compared with theprice or quote for all the remaining securities B, C, D and E in pool P,to calculate a ratio or comparison between these securities. This can bedone at regular time intervals, at any given time t after t₀. With thiscomparison that is performed by device 10 on a regular basis, an amountof absolute savings is calculated for each security A, B, C, D, E withinpool P is calculated, compared to initial time instant t₀, and an amountof relative total savings between currently purchased security A, andeach one of the remaining securities B, C, D, and E of pool P. Thisallows to track different relationships between two securities, onebeing the already purchased security A, and the other ones being all theremaining securities B, C, D, E in the pool P that have not beenpurchased, also called candidate securities B, C, D, E.

For example, as shown in FIG. 7A at time instant t₁, a unit share pricefor the currently purchased security A has increased by $1 from $50 to$51, which results in a savings of $5000 when comparing with purchaseprice of $50 per share at time instant t₀, given that the quantity ofshares that were purchased from A is 5000. Analogously, at the same timeinstant t₁, a unit share price for observed security B has increased by$0.5 from $22 to $22.50, which results in negative absolute savings of$5,681.82 when comparing with purchase price of $22 per share at timeinstant t₀, given that the quantity of shares that would have beenpurchased at time instant t₀ hypothetically would have been 11,364. Thetime period between t₀ to t₁ is hereinafter referred to as the trackingperiod.

Negative savings means that security B was not purchased at time instantt₀, so the absolute savings indicated are negative for time instant t₁,as they have not been realized. Unit share price for security B has goneup just like unit share price of security A, but percentage-wise, unitshare price for security B has gone up relative to unit share price forcurrently purchased security A, expressed in percentage as relativetotal savings of −0.3%. This comparison value of the relative totalsavings is relied upon to trigger sales and purchases of securities, asfurther explained below. Compared with security A, a value of therelative total savings are negative by −$681,82. This comparison betweenpurchased security A and observed security B means that, would securityB have been purchased at time instant t₀, instead of security A, thetotal savings would have been better off by $681.82.

Analogously, at the same time instant t₁, a unit share price forobserved security C has increased by $0.3 from $56.00 to $56.30, whichresults in negative absolute savings of $1,339.29 when comparing withpurchase price of $56 per share at time instant t₀. This is given thatthe quantity of shares of security C that would have been purchased attime instant t₀ hypothetically would have been 4,464. Negative absolutesavings means that security C was not purchased at time instant t₀, sothe calculated absolute savings are negative for time instant t₁, asthey have not been realized. Unit share price for security C has gone upjust like unit share price of security A, but percentage-wise, unitshare price for security C has gone down relative to unit share pricefor security A, the difference being expressed in percentage as relativetotal savings of +1.5%. Therefore, compared with security A, a value ofthe relative total savings is positive by +$3,660,71. This comparisonbetween purchased security A and observed security C means that, wouldsecurity C have been purchased at time instant t₀, instead of securityA, the total absolute savings would have been worse off by $3,660.71.

Analogously, a unit share price for observed security D has increased by$0.90 from $38 to $38.90, which results in a negative absolute savingsof $5,681.82 when comparing with purchase price of $38 per share at timeinstant t₀. This is given that the quantity of shares of security D thatwould have been purchased at time instant t₀ hypothetically would havebeen 6,579. Negative savings means that security D was not purchased attime instant t₀, so the absolute savings indicated are negative for timeinstant t₁, as they have not been realized. Unit share price forsecurity D has gone up just like unit share price of security A, butpercentage-wise, unit share price for security D has gone up relative tounit share price for currently purchased security A, expressed inpercentage by relative total savings of −0.4%. Compared with security A,a value of the relative total savings is negative by −$921,05. Thiscomparison between purchased security A and observed security D meansthat, would security D have been purchased at time instant t₀, insteadof security A, the total savings would have been better off by $921.05.

Analogously, at the same time instant t₁, a unit share price forobserved security E has increased decreased by $0.2 from $19 to $18.80,which results in positive absolute savings of $2,631.58 when comparingwith purchase price of $19 per share at time instant t₀. This is giventhat the quantity of shares of security E that would have been purchasedat time instant t₀ hypothetically would have been 13,158. Positiveabsolute savings means that security E was not purchased at time instantt₀, so the calculated absolute savings, in this case losses, have notbeen realized. Unit share price for security E has gone down, unlike allthe other securities A, B, C, D, and percentage-wise, unit share pricefor security A has gone up relative to unit share price for security E,the difference expressed as relative total savings percentage of +3.1%.Therefore, compared with security A, the total relative savings arepositive by a value +$7,631.58. This comparison between purchasedsecurity A and observed security E means that, would security E havebeen purchased at time instant t₀, instead of security A, the totalsavings would have been worse by $7,631.58.

A value of the relative total savings is used to trigger a sale of thecurrently purchases securities A, and to purchase one of candidatesecurities B, C, D, E, of pool P. The relative total saving basicallyexpress differences or divergences of share price or quotes between twosecurities from a chosen pool of securities, by comparing how theevolved towards each other, from a given starting time point, in theexample above at time t₀. It does not matter how the market, or thecorresponding market index performs, it only tracks differences betweenan already purchased security, and other securities within a chosenpool. In this respect, the total relative savings does not depend on theglobal market trends, but tracks divergences within a pool ofsecurities, in the example above securities A, B, C, D, E, that are fromthe same sector of classification. Therefore, the relative total savingsvalue or percentage is market neutral.

Next, trades within pool P are executed with substep S22 of S2 by device10. In this substep S22 of trading, while substep S21 is tracking andcomparing price of the securities in pool P, all the securities A thathave been purchased at time t₀ are sold, and with the realized cashamount, a quantity of candidate securities B, C, D, E other thansecurity A within the same pool P is purchased, by choosing the one thatmeets a trade trigger. The trade trigger is for example when a certainpredefined relative savings percentage or value is met, between alreadypurchased security A, and any one of candidate securities B, C, D, E, asdiscussed above with respect to substep S21 of tracking. For this aratio or comparison between a price for the already purchased security Aand all candidate securities B, C, D, E is repeatedly calculated, andcompared to a threshold value. The predefined relative savingspercentage or value is also called requested relative savings, and canserve as the threshold value. For this substep S22 of trading, whilesubstep S21 is tracking and comparing the prices of securities, thecalculated total relative savings value or percentage is constantlycompared with a predefined threshold. In the example shown in FIG. 7A,the predefined threshold as a trade trigger is set to a percentage of3.0%. At time instant t₁, the relative total savings percentage has beenmet between already purchased security A, and tracked security E withinpool P. Generally, this would be the first time instant where the methodhas detected that a relative total savings percentage or value has met acertain threshold. It is also possible to use a relative total savingsvalue as a trade trigger, for example a specific dollar amount, asexplained with respect to FIG. 7B.

Next, at time instant t₁, the entire quantity of security A is sold, inthe example shown in FIG. 7A, 5000 securities are sold at a price of$51, to generate a realized cash amount of $255,000. Thereafter, withthe realized cash amount, still at time instant t₁, a quantity ofsecurities that can be purchased of security E is calculated. This isdone by dividing the amount of realized cash with the actual purchaseprice of security E. In the example of FIG. 7A, $255,000 is divided by ashare price of $18.79, and this results in a quantity of shares ofsecurity E being 13,571. This allows to use all or almost all cashavailable after the sale of security A to purchase a newly selectedsecurity E, to substantially eliminate any cash build-up. Based on timeinstance t₀, the initial number of shares E that could have beenpurchased was 13,158. Next, in substep S22, the calculated quantity ofsecurities from security E is purchased. In the example shown, 13,571shares of security E are purchased at price $18.79. This finalizes thefirst trade between a first security and a second security that isdifferent from the first security within the same pool P, after a tradetrigger was met. Basically, with substep S22 of trading, the realizedcash amount is reinvested in the security that has fared the worst incomparison to the security that was initially invested in.

Thereafter, at the same time instant t₁, a substep S23 of calculating isperformed, in which a second or reverse order calculation is performedby device 10. This reverse order calculation is also performed in anautomated fashion by device 10. Basically, the reverse order does notmake an actual purchase or trade, as a new quantity of securities E havealready been purchased, but calculates a new reference base for the timeinstant t₁ for all securities that are within pool P, and stores thesevalues in the reference data set. This allows to track an evolution of aprice or quote of securities again, and compare them, as discussed insubstep S21 of tracking, but this time based on the new start time baset₁ instead of t₀. The step is equivalent with step S15, substep S23 whenthe initial data set for t₀ is provided. It is clear that the initialdata set generated in step S15, substep S23 is not valid anymore for anew performance of substep S21 of tracking in step S2, to track theevolution of a price or quote of each security within each pool P.Substep S23 of calculating uses the realized cash amount of substep S22,and calculates, for time instant t₁, which quantity of shares could havebeen bought for each of the remaining shares in pool P. In the exampleshown in FIG. 7A, while 13,571 of security E have been purchased withthe realized cash amount $255,000, at that same time instant t₁ it wouldhave been possible to purchase 4999 shares of security A, 11,328 sharesof security B, 4,529 shares of security C, and 6,554 shares of securityD, at the asking prices of $51.01, $22.51, $56.31, and $38.91 per share,respectively. While these purchases are not effectuated, these valuesfor the number of shares that could have been purchased at time instantt₁ and the respective share price at time instant t₁ are stored into thereference data set.

The conditions for the trade trigger can be set either as part of stepS16 when the automated trading is initiated or set-up, or can be definedeach time step S2 is performed, and the substep S21 of tracking isstarted or before it is started. For example, a user, operator, ortrader 20 can define a requested total savings percentage or a requestedtotal savings amount, or both. Also, an operator 20 can define rules forthe trade trigger, for example that both a requested total savingspercentage and a requested total savings amount need to be met beforetriggering a trade wot substep S22 of S2, or that only one of each canbe met to trigger a trade. In a variant, it is also possible that therequested total savings amount be expressed as a percentage of the cashthat was initially available with substep S16, step (i) of funding, andevery time cash is realized in S2, trading step S22, this requestedtotal savings amount can be recalculated.

After substeps S21 of tracking, substep S22 of trading, and substep S23of calculating of step S2 of the AFM have been performed, these stepsare repeated. Starting at time instance t₁, the step S21 of trackingcompares all prices or quotes of candidate securities A, B, C, D,against the purchased security E, and compares the relative totalsavings of each comparison with a trade trigger, for example a thresholdvalue for the relative total savings percentage. Note that the set ofcandidate securities has changed, including now security A, butexcluding purchased security E. Once the trade trigger has been met at atime instance t₂, step S22 of trading is performed where the alreadypurchased securities E are sold, and a realized cash amount isgenerated, to purchase a quantity of candidate securities of either A,B, C, D that has met the trade trigger, for example the threshold valueof 3% of relative total savings as compared to time instant t₁. In theexample shown in FIG. 7A, at time instant t₂, a relative total savingspercentage of 3.1% has been achieved with security B. Therefore, all13,571 securities E are sold at the actual price 19.17, to make a totalamount of $260,157 of realized cash amount. With this realized cashamount, a total of 11,715 shares of security B are purchased, at a priceof $22.25 per share. Next, substep (iii) of calculating is performed, inwhich a new reference data set is created, this time for time instantt₂.

For each pool P, the substeps S21, S22, S23 of step S2 can be repeated,until the method is stopped. Step S2 with substeps S21, S22, and S23 canbe performed on device 10 by a software code, and can access an API 32of an electronic trading system 30 for the interactions with the marketindex and the securities. With step S16, step (i) of funding, and step(ii) of making an initial purchase of the funds, the automated tradingwith step S2 can be initiated with device 10, in parallel for the entireportfolio having a certain number of pools P₁ to P_(n).

As discussed above. FIG. 7A shows an exemplary trading example performedby step S2, substeps S21, S22, and S23, at three exemplary timeinstances t₀, t₁, and t₂. Each time a trade is done and shares are sold,the quantity of the shares to be purchased from either security in poolP is automatically calculated in substep S23 of S2, also calledauto-quantity feature. FIG. 7B shows an exemplary some trades andcalculations that can be done by device 10 in the step S2, showing avariant where a user has made requested total savings percentage andtotal savings amount in dollars, a variant in which dividends are takeninto account for the trade of securities during the tracking period, anda variant where the underlying stock has been split during the trackingperiod.

FIG. 8 shows an additional aspect of the method, the aspect being usedas an algorithm to calculate a quantity of securities, when any one ofthe steps needs to calculate a quantity of shares of any security thatcan be bought with a certain amount of cash. For example, this featurecan be used in trading step S22 of S2 when the number of shares to bepurchased needs to be calculated, or for each reverse order calculationmade in the calculation step S23 of S2, when the quantity for allsecurities A, B, C, D, E in pool P needs to be calculated to create anew reference data set. This algorithm is performed to achieve bettersavings. With this additional trading algorithm, based on the realizedcash amount, first the exact quantity of shares of the securities frompool P is calculated based on the current market purchase price. In theexample shown, 1,227 shares of a security can be purchased at a shareprice of $22, with the cash amount of $27,000. Next, the algorithmcalculates the quantity of shares that have to be purchased, by dividingthe quantity of shares by 100, by rounding the resulting number to thenext integer value, and by multiplying the number by 100, to receive theactual quantity of securities that should be purchased. This roundingmethod to generate the purchase quantity of securities allows to avoidcertain fees for the purchase of an usual number of shares. Excess cashthat will not be used in the actual purchase can be funded back to atrading bank account.

In parallel to the performance of second step S2 of automated trading byapplying the trading algorithm with substeps S21 of tracking, S22 oftrading, and S23 of calculating, a third step S3 of monitoring can beperformed by device 10, in which a monitor is activated that is operatedby device 10 of system 100, or by another computing device of system100, allowing to observe the evolution of the securities, changes to thesecurities, and the underlying securities index, to detect abnormalsituations. These can include incidents relating to the stock exchangesthemselves, such as trading stops by the NYSE, LSE, DAX, etc., incidentsrelating to stocks within the pools P₁ to P_(n) of the portfolio orunexpected events which cause a particular stock to unexpectedly rise orfall. Should this occur, further trading of a particular security or theentire trading for the affected portfolio or only by the affected pool Pperformed by the system 100 can be deactivated and an appropriatewarning or alert message can be generated, that can be further processedby a user 20 of the system 100. Certain abnormal occurrences can bedetected and accounted for by the system 100, while others can behandled manually once the user has been notified by such warning oralert message.

The third step S3 of monitoring is performed simultaneously with thesecond step S2 of automated trading. The third step S3 of monitoring canalso include the step of trailing trigger S31 and the step ofrescheduling S32 for each pool that is under automatic trading by stepS2. In addition, with step S3, system 100 can also automatically detectand compensate for dividend payments related to a security, splits of asecurity. However, it is possible that certain unforeseeable events likesudden decline of a security, trading stops of a security, etc. generatea warning message that requires user intervention. These abnormalitiescan be monitored by monitoring criteria in the form of rules andalgorithms, for example but not limited to the monitoring of rapid valueincreases and declines above a certain threshold value, the monitoringof unusually low or high trading volumes above a certain upper boundarythreshold or below a certain lower boundary threshold, withdrawal ofcertain securities from trading. Moreover, step S3 can also monitor theoverall performance of the portfolio, and can alert the user 20 whencertain performance criteria have been met, for example a relativeincrease of the overall value over a time period, or an absoluteincrease to a certain monetary value.

Next, with step S4 of stopping the trading, the method of automatic fundmanagement can be stopped or terminated at any time based on differentcriteria. With the execution of step S4, all trading of securities inthe portfolio of user, investor, or operator 20 are stopped. Forexample, termination of the automatic trading can be done by the usermanually, for example upon reception of an alert from the step ofmonitoring S3, or can be done automatically by processing device 10 forexample when a predefined user-defined performance criteria has beenmet. Next, in the termination step S4, it is possible to stop anyfurther trades, and to sell off all the securities of all the pools P₁to P_(n) in portfolio, or to sell off all securities of one or severalpools P, to create a new cash position that represents the entireportfolio, or a new cash position for one or several pools P. These cashpositions can thereafter be transferred to a bank or fund manager forfurther trading.

In the context of the embodiments of the present invention, as discussedabove, an exemplary pool P was discussed with securities A, B, C, D, Eassigned thereto, and securities A, B, C, D, E all belong to the sameset of securities as defined by step S14, and these sets have beendefined for categorizing or classifying securities into a certain GICSsector and if possible, a certain industry group. However, it is notedthat having five securities A, B, C, D, E is only exemplary, and it ispossible to have a different number of securities in each group,preferably between 2 and 6 different securities. Also, the use of GICSstandard is exemplary, other standards may be used.

FIG. 4 shows an exemplary embodiment of the system 100 that can performthe automated fund management as described above. Processing device 10,having one or several hardware processors and storage memory, isconfigured to process computer readable instructions, and the computerinstructions, when performed on the processors of processing device 10,can perform a method of autonomous fund management. Processing device 10can be in the form of a personal computer (PC), Macintosh computer,remote server, cloud based server, and can be connected via a securedfirewall 18 online to the Internet 40. Processing device 10 is alsoconnected to data output devices like a monitor 12, printers, tablets,smart phones, to visualize data and performance to a user 20, and canalso be connected to input devices like a mouse 16, trackpad, orkeyboard 14 so that the user can manually enter data and provideinstructions. For example, monitor 12 can be used to alert user ofcertain trading abnormalities, in the form of a prompt, email, or othernotifications. A non-transitory computer readable medium 70, for examplea portable hard disk, flash disk, universal serial bus (USB) drive,CD-ROM, BluRay™ disk, DVD disk, can be used to store a computer programthereon, and the computer program can be made of computer instructionsthat are configured to perform the method for autonomous fundmanagement, when the computer program is executed on the processingdevice 20 of system 100. Processing device 20 is equipped with a readeror port for accessing and storing the computer program on the medium 70.

Moreover, different data service providers 50 are also connected to theInternet 40 and can provide for data services that are used by thesystem 100. For example, certain securities-related service data can bestored in databases 52, 54 and the data can be managed and madeaccessible with a processing device 56 to the Internet 40, for examplevia online databases or APIs. For example, online services of differentpublic data service providers can be accessed, for example the ISIN tomonitor changes in the ISIN registrations, online services of the SECand other securities regulatory agencies can be accessed, to monitorchanges and alerts related to securities, online services of differentprivate data service providers can be accessed, for example the MorganStanley Capital International (MSCI) data service, Standard & Poor's(S&P) data services, for example to access GICS information, so thatdata from these services can be transferred via the Internet 40 toprocessing device 10 for the use and analysis in system 100.

Moreover, an e-trading service 30 having a data processing device canalso be accessed by the processing device 10 via the Internet 40 and anAPI 32, to effectuate securities purchases and trades for a stockexchange 60. Exemplary e-trading services 30 can be, but are not limitedto E-Trade Financial™, Optionshouse™, TD Ameritrade™, Cybertrader™.These e-trading services 30 can be used together with their traditionalbanking services for account management, or an external banking servicethat is independent from the e-trading service 30 can be used, forexample online bank 80 that also offers online banking via the Internet40. Processing device 10 is configured to operate instructions forsecurities purchase and sale orders based on the API 32 that is definedby the e-trading service 30.

Another aspect of the embodiments of the present invention is the use ofa trailing trigger algorithm for executing delayed trades, as explainedwith respect to FIGS. 5A.5D. This trailing trigger delays tradedecisions as compared to an already existing trade trigger that arebased on the trading substep S22 of step S2. The trailing trigger is anadditional feature of the trading algorithm of substep S22 performedwith step S2 that allows to create greater savings, as compared to atrade that would be performed with the trade trigger in substep S22,during a certain time period of the trading, for example the tradetrigger of the above discussed example of 3% percentage of totalrelative savings, also shown in FIG. 7A. The trailing trigger can bepart of step S3 of monitoring, for example step S31 that monitors thestep of tracking S21 from the automated trading S2.

In FIGS. 5A-5C, a comparative timely evolution graph of a price or quoteof an already purchased security A is shown in comparison to a price ofquote of a candidate security for purchase B, C, D, E, the comparisonbeing shown in percentages, along a time line with time instances 30,60, 90, 120. The ratio graph represents the actual total relativesavings. In addition, the requested relative saving percentage is shownat a constant level at about 2.4%, and in FIG. 5A, a trailing trigger isshown about 10% at about 2.16%, shown with the black line. The value ofthe trailing trigger can be set by operator, in the variant shown it isset to 10%, but this value can be different. Without the trailingtrigger feature, substep S22 of step S2 will trigger a trade to sell allsecurities A and to buy a candidate security when the actual savingsreaches the requested savings, in the example shown 2.4%. In the exampleshown, at the start of the trading at minute zero (0) the trailingtrigger is set at 10% below the requested relative total savings. Next,as shown in FIG. 5B, with the evolution of time during the tracking ofthe trading with step S2, substep S21, the trailing trigger is increasedto Level I by step S31, at the time instant when the actual savingswould become higher than the requested savings. In other words, insteadof triggering a trade with substep S22, step S2, no trade is yettriggered, and the evolution of the requested savings expressed in thecomparative graph is further tracked, and the trailing trigger level isincreased to a level of the actual savings. Also, with the trailingtrigger algorithm, at this time instant, device 10 can generate an alertto notify operator 20 of the fact that the actual savings are above therequested total relative savings for the particular trade, shown thatthe ratio graph being above requested savings level of 2.4%.

Starting from the time moment Level I has been reached by the ratiograph reaching the requested savings level, after the trailing triggerhas been place to the same level of the requested savings level, thetrailing trigger can be gradually increased by the algorithm of device10 by a predefined rate, for example but not limited to a rate of0.3%/hour, or could continue to follow 10% behind the current value ofthe actual savings, as long as the actual savings are still increasing.Typically, if the actual savings increase above the initially requestedsavings (i.e. 2.4%), the trailing trigger can be set to follow theactual savings below a certain percentage, for example 10%, and at thesame time, can be set to not to decrease when the actual savings drops.Thereafter, once the actual savings drops below the trailing triggersavings percentage, the trade of the securities can be executed, byexecuting step S2, substep S22 of trading. This is shown as Level II inFIG. 5C. In the variant shown, the trailing trigger achieved a savepercentage of 3.75% instead of the requested initial savings of 2.4%.The trailing trigger algorithm can run in parallel with step S2, substepS21 by device 10, and allows to take advantage of a situation wherethere is a strong divergence between securities that are within the samepool P. FIG. 5D shows an exemplary flow chart of the execution of thetrade by step S2, substep S22 as a function of the actual savingsreaching Level I and Level II, the level or threshold being adjusted bythe step S31 of the monitoring step S3. After execution of the trade ororder, the system 100 can immediately perform the calculation of theamount of securities of substep S23 of calculating.

Moreover, according to yet another aspect of the embodiments of thepresent invention, the trading algorithm can also include a step ofrescheduling a trade S32. The step of rescheduling allows to apply arescheduling rule for rescheduling trades that have not been performedduring a certain time period. For example, when the step of tracking,with step S2, substep S22 of trading is performed, the step ofrescheduling S32 can be performed in parallel, for example, as part ofthe step S3 of monitoring. Sometimes, the evolution of the stock marketand the securities within a pool are such that the requested savings arenot achieved, and will not be achieved for a long time. This means thatthe step of tracking of S2, substep S21 could run for a long timewithout that a trade is executed by substep S22. It is also possiblethat only negative savings will result during some time period oftrading, for example, when the purchased stock declines, while all othercandidate stock rise. For such situations, a rescheduling step S32 canbe activated and performed by the processing device 10. For example,rescheduling step S32 can follow a rule such that when after a certaindefined time period of trading, for example a fixed duration like a partof a trading day, one or more trading days, the requested savings thatare used in substep S21 of tracking are not be met, the reschedulingrule can take place. This rule signifies that the same pending tradethat is tracked by substep S21 is cancelled by intervention of step S32,and a new pending trade is entered with substep S21 at a time momentt_(R). However, as a new reference for tracking savings, a new referencedata set for time moment t_(R) is done, by substep S23. Assuming thatsecurity A is the currently purchased security, this step calculateswhat quantity of candidate securities B, C, D, E, could be purchased attime instant t_(R), based on a current value of the purchased securitiesA.

Once the reschedule rule has been triggered, the rescheduling stepcalculates the to-go savings, the to-go savings being the actual savingsat the time instant t_(R) minus the requested savings that were used insubstep S21. A first execution reschedule can be performed to make thetrade. The first execution reschedule rule is set when (a1) the pendingtrade order of substep S21 has been pending for a tracking period ofthree (3) days or more, (b1) the lowest to-go savings that was observedduring the tracking period was lower than the requested savings, and(c1) the requested savings average of the three days of the trackingperiod were lower than zero (0). When (a1), (b1), and (c1) can beobserved by device 10 with rescheduling step S32, the first criteria forexecution reschedule has been met, and the pending order or trade thatis defined in substep S21 is executed with substep S22.

A second execution reschedule will execute the order with the lowestto-go savings. A second execution reschedule rule of a trade can be setwhen (a2) the pending trade order of substep S21 has been pending for atracking period of six (6) days or more without the occurrence of anyreschedule, and (b2) the lowest observed to-go savings during thetracking period was lower than the requested savings. When (a2) and (b2)can be observed by device 10 with rescheduling step S32, the secondcriteria for execution reschedule has been met, and the order or tradethat was defined in substep S21 is executed with step S22.

A reschedule without execution can be performed based on a rule of atrade to reenter the order at the current market conditions, with nochanges to the order. This rule can require that (a3) the pending tradeorder of substep S21 of step S2 has been pending for a tracking periodof six (6) days or more without the occurrence of any reschedule, and(b3) the lowest observed to-go savings during the tracing period wasgreater than the requested savings.

TABLE I Days after order entry CONDITIONS Execution Reschedule 1 3 1to-go < requested savings 3 to-go < 0 Execution Reschedule 2 6 1 to-go <requested savings Reschedule 6 All to-go > requested savings

FIG. 9 shows an example of a table that can be used as a master securityfile, and can be created as metadata that is appended or linked to eachsecurity of the first group, so that a filtering can be applied to thisdata, for generating securities from the second group that will becategorized into multiple choice pools A, B, C, D, E. This data can begathered from the e-trading service 30 or from the data services 50. Insome instances, the data can be gathered directly from the stockexchange 60. FIG. 10 shows a table that is attached to each order ortrade, having the exact information that is required to execute a tradevia an API of a e-trading service 30.

FIG. 12 shows experimental results of the system, to determine thesaving probabilities based on a predetermined amount for the requestedsavings. It can be seen that a user that wishes to save 2% on a tradehas an 86.3% percentage chance that such trade will actually happen. Thesimulation was run for twenty (20) trading days with shares of 38different securities that were shares of companies. Also, the timelyevolution of the pending trades are shown, up to twenty (20) days afterthe monitoring of the pending order started.

FIG. 13 shows charts showing additional simulation results of the system100 showing executed trades as a function of saving percentagesrequested, and different curves are presented with stock of differentvolatility. The charts show that by requesting a smaller savingspercentage, the probability of executing sales is higher, which resultsin more trades being executed. For example, when serving percentagesbetween 0.5% and 2.5% are pursued, results are more effective, as thechances of triggering a sale would be over 80%.

FIG. 14 shows a screen shot from a prompt or a message of a graphicaluser interface generated by processing device 10 and displayed onmonitor 12 for operator 20, showing information related to the requestedsaving and the actual savings of pending trades, for example with thepurpose to alert the user of a certain level of savings that are abovethe requested savings. Two pending trades or orders are shown,indicating the quantity of the securities that are to be sold and to bepurchased, with the associated requested and actual savings. Bothpending trades or orders have reached Level II, where the actual savingshave dropped below the trailing trigger level, so that the orders ortrades will be executed. The trade can be triggered automatically bydevice 10, or can be executed manually by operator 20 upon reviewing theprompt. On the message, three major trading indexes are also shown, theDow Jones, S&P 500, and the Nasdaq Composite, serving as a comparativeto the actual performances of a trade.

While the invention has been disclosed with reference to certainpreferred embodiments, numerous modifications, alterations, and changesto the described embodiments are possible without departing from thesphere and scope of the invention, as defined in the appended claims andtheir equivalents thereof. Accordingly, it is intended that theinvention not be limited to the described embodiments, but that it havethe full scope defined by the language of the following claims.

The invention claimed is:
 1. A method for a computer-based autonomousfund management, the method operated on a computer having access to theinternet, the method comprising: accessing a portal of an online tradingservice via an application program interface by the computer, the onlinetrading service permitting a sale and a purchase of securities;selecting a certain number of securities from securities available atthe online trading service to create a first group of securities from apublicly traded index; discarding securities from the first group basedon filter criteria to create a second group of securities; categorizingthe securities from the second group of securities to assign thesecurities to different industry sectors; grouping a predefined numberof the categorized securities into a number n of security pools, suchthat each security in a same security pool is categorized to a sameindustry sector; trading securities within the security pools byperforming a security sale and/or a purchase via the portal of theonline trading service during a trading period, such that a firstquantity of a first security within a pool is sold and a second quantityof a second security within the pool is purchased when a trade triggeris met, the trade trigger including an event when a ratio between aprice of the first security and a price of the second security meets apredefined threshold, wherein before the trading securities, the methodfurther comprises, observing a purchase price of the first security fromthe pool, observing a sales price of the second security from the pool,comparing the purchase price with the sales price during the observingto determine a level of actual savings between the first and the secondsecurity, and increasing a level of the predefined threshold of thetrade trigger upon reaching a predetermined level of savings in thelevel of actual savings determined in the comparing, wherein in thetrading securities, the performing of the security sale and/or thepurchase is done when in the observing, the level of actual savingsdrops below the increased level of the predefined threshold of the tradetrigger; and displaying and updating the level of actual savings and thepredetermined level of savings on a graphical user interface for eachtrading period.
 2. The method according to claim 1, wherein thecategorizing uses a standardized securities classification scheme. 3.The method according to claim 1, wherein the filter criteria discardssecurities with a volatility that is above a predetermined threshold anddiscards securities with a publicly tradable volume that is below apredetermined volume.
 4. The method according to claim 1, wherein thetrading further comprises: selling the first quantity of the firstsecurities from the pool to generate a first cash amount; calculatingthe second quantity of the securities from the second security from thepool based on the first cash amount, the first security being differentfrom the second security; and buying the calculated second quantity ofsecond securities from the pool.
 5. The method according to claim 4,wherein the trading further comprises: calculating a quantity of eachsecurity within the pool that could be purchased with the first cashamount, and saving the quantity of each security in a data set.
 6. Themethod according to claim 1, further comprising: observing a purchaseprice of the first security from the pool, observing a sales price ofthe second security from the pool; comparing the purchase price with thesales price during the observing to determine a level of actual savingsbetween the first and the second security; comparing the level of theactual savings with the trade trigger; and rescheduling the tradingsecurities, when the observing determines that the trade trigger has notbeen reached for a predetermined amount of time, and an average level ofthe actual savings over the predetermined amount of time being lowerthan zero.
 7. A system for a computer-based autonomous fund management,the system comprising: a computer having access to the internet; and adisplay screen, the computer configured to: access a portal of an onlinetrading service via an application program interface by the computer,the online trading service permitting a sale and a purchase ofsecurities; select a certain number of securities from securitiesavailable at the online trading service to create a first group ofsecurities from a publicly traded index; discard securities from thefirst group based on filter criteria to create a second group ofsecurities; categorize the securities from the second group ofsecurities to assign the securities to different industry sectors; groupthe categorized securities from the second group of securities into aset of security pools, each security in a same security pool assigned toa same category of securities; and during a trading period, tradesecurities within the security pools by performing a security saleand/or a purchase via the portal of the online trading service, suchthat a first quantity of a first security within a pool is sold and asecond quantity of a second security within the pool is purchased when atrade trigger is met, the trade trigger including an event when a ratiobetween a price of the first security and a price of the second securitymeets a predefined threshold, wherein before the trading securities, thecomputer is further configured to, observe a purchase price of the firstsecurity from the pool and observe a sales price of the second securityfrom the pool, compare the purchase price with the sales price duringthe observing to determine a level of actual savings between the firstand the second security, and increase a level of the predefinedthreshold of the trade trigger upon reaching a predetermined level ofsavings in the level of actual savings determined in the comparing, andwherein in the trading the securities, the performing of the securitysale and/or the purchase is done when in the observing the level ofactual savings drops below the increased level of the predefinedthreshold of the trade trigger.
 8. The system according to claim 7,wherein the computer is further configured to categorize the securitiesby using a standardized securities classification scheme.
 9. The systemaccording to claim 7, wherein the filter criteria discards securitieswith a volatility that is above a predetermined threshold and discardssecurities with a publicly tradable volume that is below a predeterminedvolume.
 10. The system according to claim 7, wherein during the tradingof the securities, the computer is further configured to sell apredetermined amount of the securities from the first pool to generate afirst cash amount; calculate the second quantity of the securities fromthe second security from the pool based on the first cash amount, thefirst security being different from the second security; and buying thecalculated second quantity of second securities from the pool.
 11. Thesystem according to claim 10, wherein during the trading of thesecurities, the computer is further configured to: calculate a quantityof each security within the pool that could be purchased with the firstcash amount, and saving the quantity of each security in a data set. 12.The system according to claim 7, wherein the computer is furtherconfigured to: observe a purchase price of the first security from thepool, observe a sales price of the second security from the pool;compare the purchase price with the sales price during the observing todetermine a level of actual savings between the first and the secondsecurity; compare the level of the actual savings with the tradetrigger; and reschedule the trading securities, when the observingdetermines that the trade trigger has not been reached for apredetermined amount of time, and an average level of the actual savingsover the predetermined amount of time being lower than zero.
 13. Anon-transitory computer readable medium having computer instructionsrecorded thereon, the computer instructions configured to perform amethod for a computer-based autonomous fund management when executed ona computer, the computer having access to the internet, the methodcomprising: accessing a portal of an online trading service via anapplication program interface by the computer, the online tradingservice permitting a sale and a purchase of securities; selecting acertain number of securities from securities available at the onlinetrading service to create a first group of securities from a publiclytraded index; discarding securities from the first group based on filtercriteria to create a second group of securities; categorizing thesecurities from the second group of securities to assign the securitiesto different industry sectors; grouping a predefined number of thecategorized securities into a number n of security pools, such that eachsecurity in a same security pool is categorized to a same industrysector; and trading securities within the security pools by performing asecurity sale and/or a purchase via the portal of the online tradingservice during a trading period, such that a first quantity of a firstsecurity within a pool is sold and a second quantity of a secondsecurity within the pool is purchased when a trade trigger is met, thetrade trigger including an event when a ratio between a price of thefirst security and a price of the second security meets a predefinedthreshold, wherein before the trading securities, the method furthercomprises, observing a purchase price of the first security from thepool, observing a sales price of the second security from the pool,comparing the purchase price with the sales price during the observingto determine a level of actual savings between the first and the secondsecurity, and increasing a level of the predefined threshold of thetrade trigger upon reaching a predetermined level of savings in thelevel of actual savings determined in the comparing, and wherein in thetrading securities, the performing of the security sale and/or thepurchase is done when in the observing, the level of actual savingsdrops below the increased level of the predefined threshold of the tradetrigger.
 14. The non-transitory computer readable medium according toclaim 13, the method further comprising: observing a purchase price ofthe first security from the pool, observing a sales price of the secondsecurity from the pool; comparing the purchase price with the salesprice during the observing to determine a level of actual savingsbetween the first and the second security; comparing the level of theactual savings with the trade trigger; and rescheduling the tradingsecurities, when the observing determines that the trade trigger has notbeen reached for a predetermined amount of time, and an average level ofthe actual savings over the predetermined amount of time being lowerthan zero.